"The bottom line is that Brexit is ultimately a political crisis and one that is not likely to be resolved in a hurry. There will be many twists and turns in the path to ultimate resolution.

"There may yet be circumstances that give rise to bigger systemically risky events. For now, we don't think we are quite there and we feel that the current architecture of the global financial system is more resilient than it used to be when the last big storm hit us.

"That said, caution is clearly warranted. The global economy was not in great shape pre-Brexit and is now worse. There is likely to be more downside to come, particularly in European equities and in GBP.

"We see US assets across the spectrum - stocks, FX, credit and government bonds - as relative safe havens, and parts of securitized products, particularly US resi credit and broad exposure to US housing, as being relatively insulated."

Hungary's central bank lowered its benchmark base rate by 15 basis points to a record-low 1.05%. Though the bank signaled limited room for more cuts, some analysts see the rate falling to 0.75% in coming months.

Hungary, by the way, is in the negative rate club - the bank's overnight deposit rate is minus 0.05%.

What's left? Zimbabwe? Hungary becomes the first emerging market to sport negative rates as the central bank lowers its overnight deposit rate to -0.05%. The three-month deposit rate was cut to 1.2%. The move comes amid lowered expectations for both growth and inflation.

French economy minister Emmanuel Macron says that if Britain votes for an EU exit:

France will relocate its migrant camp from Calais to Britain.

France will roll out "a red carpet" for bankers fleeing London.

That the bilateral relationship between France and Britain could change abruptly, including the creation of new obstacles to trade.

That Brexit could torpedo a deal with France, known as Le Touquet, that allows Britain to carry out border controls and keep unwanted migrants on the French side of the Channel.

Macron says that the EU would be weakened as a military, diplomatic and economic powerhouse if the UK left. But irrespective of the outcome of the referendum, the debate has damaged the bloc’s unity. “The EU has no choice but to become a true military and diplomatic power, something it has been always reluctant to be, mostly by lack of ambition.”

European stocks are offering a chink of light for the global equity gloom, staging an early bounce after last week's bruising selloff.

Middle Eastern stocks plunged overnight, while Asian bourses remained under pressure, due to lingering concerns about China's economy and a fresh fall in oil prices following the lifting of Iranian sanctions.

Eurozone Q2 GDP growth has been revised up to 0.4% on quarter from an initial estimate of 0.3%, boosted by household consumption and exports. GDP expanded 0.5% in Q1. (PR)

Meanwhile, Japan's economy contracted an annualized 1.2% in April-June vs an initial estimate of a 1.6% drop, although capital expenditure fell 0.9%, more than the original estimate of 0.1%, clouding growth prospects.

The widely watched eurozone manufacturing PMI for August remained flat at 52.4, matching the previous month, although the figure was slightly better than the 52.2 reading of economists due to a stronger performance from Germany.

A similar survey of activity in the eurozone's services sector, however, reached a two-month high for August, pushing the composite output index to a two-month high of 54.1.

"The flash PMI suggests that the euro zone is still experiencing one of its best periods of economic growth and job creation during the past four years," said Markit's Rob Dobson.

A slump in emerging market confidence has led to $1T in capital outflows over the past 13 months, roughly double the amount that fled during the financial crisis.

The sustained exodus of capital highlights concerns that developing economies, suffering slowing growth and weakening currencies, are relinquishing their longstanding role as locomotives to become a drag on demand instead.

Lithuania is poised to become the 19th member of the eurozone at midnight tonight, following the path of other former Soviet satellite states, Latvia, Estonia and Slovakia.

"We don’t have to accept the pressure of being a small country with a little currency," said Valdas Adamkus, who was president of Lithuania for about a decade until 2009. "Now we are members of the eurozone."

Banca Monte dei Paschi di Siena collapses 17.55% after being told that it needs to raise €2.11B. The world's oldest bank is exploring its strategic options.

And while the tests were otherwise not as bad as expected, the STOXX Europe 600 Banks index is -1.2%. "The stress test results are positive, but the real test will be on European bank lending and on this the jury is still out,” says strategist Luca Paolini.

KPMG believes banks still face a significant challenge. "The sector remains chronically unprofitable and must address their €879B exposure to non-performing loans as this will tie-up significant amounts of capital," KPMG says.